5 Laws for Parents Teaching Financial LiteracyPosted April 8, 2014, 3:00 pm by
For better or worse, these aren’t laws in the legal sense. No one will arrest a person for not raising children with excellent money management habits.
I’m talking about the laws of nature that operate when we set out to raise teens with financial literacy. Laws such as the Law of Gravity, Murphy’s Law, and the Law of Conservation of Mass aren’t laws you have to follow, per se, but if you understand them, you get TWO REWARDS: First, you get a lot less confusion in your life about why things happen the way they do, and second, you get a lot more control in making things go YOUR way.
Laws for Teaching Financial Literacy
Thankfully, the laws are pretty simple, and we are all about making them really, really easy for parents.
1. The Law of Talking About Money
What you say to your teen about money is just as critical as what you don’t say. If money is a taboo or sensitive subject with your teen, we recommend that you address that. What makes it sensitive or taboo? Is the conversation about money in your home empowering or disempowering?
2. The Law of Practicing Money Management
How your teen manages their money and what they are accountable for now is the most reliable predictor of their financial future. Teaching a solid money management strategy now, when your teen is young, will serve them their whole life.
3. The Law of Learning About Money
Wealthy people find money and how it works interesting. You can support your teen with engaging resources and opportunities to explore this subject.
4. The Law of Giving
When your teen adopts a cause that matters to them and gives 10% of all the money they receive to that cause directly, they get to experience their power in the world.
5. The Law of Aligning Beliefs
What you believe about money has a profound and lasting impact on your net worth! Does your teen believe that money is for "other people" or for "adults only" or "for later, when they have more of it"? Does your teen believe that "money is hard to make and grow" or that "money is complicated" or that "there’s never enough"? These disempowering beliefs regulate the actions we take. The actions we take with our money produce our net worth. Our net worth limits our options and our power.